The length of time it will take for the SBA to approve PPP loans usually varies. Most often, the PPP loan funding timeline is around two weeks from when you submit your application to the time the lender disburses funds. Once approved, the SBA mandates lenders to disburse funds within 10 calendar days. Your loan is considered approved once the SBA assigns you a loan number.
Businesses are advised to submit their PPP applications as soon as possible in order to guarantee timely approval. After you apply for a PPP loan/s for your business, your application and documentation will be reviewed and your application approved before you can receive your loan money.
Once your application is completed, it will be placed in a virtual queue for processing by a loan officer. This can take a few days depending on demand. But if you have all documentation in place, your approval can take as little as a day or two, depending on your lender.
But once your loan is approved, reports have it that it would take around 5-7 business days for your funds to become available. In the United States, the lender has up to 10 calendar days to fund your account immediately after it receives the notification of your loan approval from the SBA.
PPP Loan Funding Timeline
First, you need to understand that this timeline may vary based on a couple of factors, such as the lender you select and whether additional information is required to process your application. However, the timeline of PPP loan funding includes;
The first step to obtaining your PPP loan is to complete your loan application with a PPP-approved lender. Have in mind that the SBA has a PPP lender search tool that ensures that you can easily find your lender. For those who haven’t previously received a PPP loan, you will be expected to complete the first draw PPP application. Also, note that this application is relatively straightforward and wouldn’t take that much time to complete.
Coupled with your application, you will also have to submit certain documentation. Paperwork requirements are known to vary from one lender to another and will most often include tax forms, payroll records, and documentation showing a reduction in gross receipts.
Those who have previously received a PPP loan will have to complete the second draw application. Expect this stage to take anywhere from around 15 minutes to an hour. Immediately after the lender receives your application and documentation, you are on to the next step.
Once the lender receives your application and documentation, the next step is for the lender to submit this information to the SBA. This is done through the SBA’s E-Tran system, an online portal that has helped to reduce the approval time for SBA loans. Note that this system has made it more convenient and smoother to get SBA loan approval, but it isn’t without its flaws.
Although it is possible to obtain approval within a day or so, don’t forget that there could be delays. According to reviews from applicants, the biggest delays were witnessed across larger banks and financial institutions that were processing thousands of applications.
While you may get approved as quickly as a day or two after submitting your application to your lender, have in mind that there may be unavoidable delays. Ensure to reach out to your lender to know more about the loan approval times, and find out how updates are provided about your loan’s status.
Processing & Account Deposit
Note that immediately after your loan has been approved, your lender will start processing the loan before funds are deposited into your account. According to the SBA, “a loan is considered approved once the loan is assigned a loan number by SBA.” The agency further explains that: “The lender will have to make a one-time, full disbursement of the PPP loan within ten calendar days of loan approval.”
It simply entails that if your loan was approved on April 12, the lender has until April 22 to disburse your funds. If you fail to receive your loan funds in your account based on the 10-day timeline, it is recommended you reach out to your lender to make sure that there are no problems, such as an incorrect bank account number.
Common Causes of PPP Loan Delays
Just as was noted above, how long it will take for SBA to approve PPP loans will vary based on certain factors. Those factors include;
Basic information problems
According to experts, one of the major factors that may cause your PPP loan approval to be delayed is providing incorrect information on your application, such as:
- A discrepancy in or incorrect business info (addresses don’t match, etc.)
- Incorrect tax ID (Social Security Number, EIN)
- Mistake in the PPP First Draw SBA loan number (or missing) when applying for second-draw loans
Issues with incorrect or insufficient documents
Have it in mind that many loan applications are delayed because the borrowers made available the wrong documents, or not sufficient proof to validate their claims of annual revenue or losses, such as:
- Incorrect or insufficient documents
- Incomplete documentation provided
- Low-quality document scan or copy
Not completing all the necessary steps
Also note that a good number of PPP loans are delayed just because the borrower became distracted or maybe failed to complete the application process and forms, review it, and sign it. Have it in mind that you are tasked with making sure you get through the whole process and also submit your application form and documentation to your lender.
SBA lender delays
Since lenders will have different processes and requirements, have it in that they will also have different processing times. Have in mind lender delays in the PPP loan approval process tend to occur for the following reasons:
- The borrower’s application is more complicated than typical PPP applications: You need to realize that complicated applications take more time and will warrant more scrutiny. Also note that submitting alternative documentation from what is requested may also cause delays in your loan application, especially since the process and alternative documents will have to be approved at varying levels
- The borrower’s application had errors or inconsistencies: It is also important to note that lenders run their own analysis on applications even before forwarding them to the SBA for approval. According to experts, any mistake at this stage will warrant back and forth with the borrower to get clarification, and in most cases require the filing of a corrected application
- The application was rejected by the SBA with a “hold code”: Have it in mind that the SBA has inculcated new checks to limit program fraud. A good number of these checks entail that the application will be canceled. Others can be corrected, but it requires extra effort by lenders.
Indeed the SBA will have to approve every single PPP loan, and this entails that there may be some potential SBA delays, depending on demand. In 2020, the SBA was ridiculed for having an unacceptable rate of PPP fraud.
Owing to that, changes were inculcated in subsequent years to prevent fraud and this has increased the time it takes for them to process loans. Therefore, even very well-completed applications will require days once they reach the SBA for approval. If there are errors with the borrower’s application, then these delays will increase.